NC’s massive school facility needs could overwhelm agreement on “historic” class size reductions

When North Carolina lawmakers approved what one Republican described as a “historic” investment in reducing elementary class sizes this week, it was viewed by many as a godsend for school districts that feared thousands of teaching jobs were at stake.

But what comes next—namely, funding new classroom space in the state’s aging, and in some cases overcrowded, public schools—may be equally, if not more, daunting, advocates say.

State estimates pegged school facility needs at about $8 billion before GOP lawmakers shuttled through their controversial plan for trimming K-3 classrooms in recent years.

And while district leaders have yet to develop a total capital cost estimate for the new class size caps that will be phased in over the next four years, experts say districts—particularly those located in economically depressed regions—will be hard-pressed to find the billions of dollars necessary for new K-12 infrastructure in North Carolina.

“The trailer industry is the winner of this,” groused state Sen. Jay Chaudhuri, a Wake County Democrat, last week as the Republican-controlled state Senate prepared to pass a just-revealed deal on class size. The agreement was negotiated behind closed doors by top General Assembly Republicans and representatives for school administrators.

“Like in all bills, there’s always more work to be done,” acknowledged state Rep. Craig Horn, a Union County Republican who helped to craft this week’s hotly-debated compromise. “I’m looking forward to your support on that…work.”

Indeed, local school district and county commission leaders say K-12 infrastructure will be key when state lawmakers return for their “short” session in May. However, school district representatives widely applauded legislators’ move to phase in lower class sizes over the next four years and establish a recurring $61 million budget appropriation for arts, music and P.E. teachers that risked being crowded out by the need for more core classroom educators.

Senate and House legislators passed the deal in recent days. And while it’s unclear whether Democratic Gov. Roy Cooper will veto the bill—which also includes seemingly partisan jabs at Cooper over the Board of Elections and the Atlantic Coast Pipeline—legislators have a veto-proof majority in both chambers.

Kevin Leonard, executive director for the N.C. Association of County Commissioners (NCACC), said his organization is assembling data from the state’s 100 counties to put a cost estimate beside districts’ “emerging” capital costs following this week’s vote.

“This issue is the number one legislative priority for our association, and we continue to advocate for increasing state resources for school capital,” added Leonard.

The NCACC survey comes amid growing signs that school districts—which haven’t seen a significant infusion of state cash for capital expenses in more than two decades—face an uphill battle funding new school construction and upkeep in older facilities.

In 2016, a state official told legislators that, through 2021, districts would need to spend roughly $8 billion on construction, renovations and maintenance. By 2026, the bill would top $13 billion.

And that ballooning cost—which didn’t factor in the state’s new class size caps—would have a disproportionate impact on poor and rural counties that lack the tax base to fund capital improvements.

***

In North Carolina, state and local governments have historically shared the cost of funding public schools, with the state generally charged with bankrolling operational expenses and locals tasked with school construction and maintenance.

While state officials would periodically chip in on capital costs from the 1950’s to the mid-1990’s by putting forth bonds and sales tax revenues every decade or so, according to Leanne Winner, director of governmental relations for the N.C. School Boards Association (NCSBA), the state generally adhered to its commitment of funding operations.

But those lines blurred in the last two decades. Today, local governments put in about $3 billion annually for public school operations, Winner says, and North Carolina legislators haven’t authorized a statewide school construction bond since 1996.

“If that line had been maintained, we wouldn’t have that $8 billion hole we’re looking at today,” says Winner.

The impacts can be found across the state’s 115 school districts, but they are particularly onerous in some, advocates say, and the needs may be even greater than state and local leaders estimate.

A 2017 survey by an independent, state-commissioned consultant sought to assess the infrastructure demands of nine rural school districts—Anson, Bertie, Clay, Davie, Greene, Harnett, Jones, Scotland and Yancey counties.

In those districts, the consultant found $630 million in unmet facility needs, more than double the $287 million or so those districts self-reported. And those numbers will surely tick upward as locals act to reduce K-3 class sizes in the coming years.

Harnett County, located just north of Fayetteville, faced the greatest challenge, according to the report, with more than $239 million in capital needs.

Bill Morris, chairman of the Harnett Board of Education, points out roughly 6,000 of the district’s students are currently taught in mobile classrooms or trailers. That’s about 30 percent of the district’s total enrollment, which surpasses 20,000.

“Obviously, any help from the state would be greatly appreciated,” Morris told Policy Watch Wednesday. “Harnett fell behind. It’s not this board’s fault. It’s not this county commission’s fault, but Harnett fell behind in the last 30 years.”

Yet Morris, like most local school leaders, couldn’t say yet what the capital cost of new class size caps would be over the next four years.

A spokesman for Wake County Public School System, the state’s largest K-12 district, said local officials don’t expect to have an estimate on the new costs for at least a month.

Charlotte-Mecklenburg Schools (CMS), the second-largest district, is undergoing its own review of the expected financial impacts.

And while CMS spokesman Tracy Russ applauded state legislators for their action this week, he said locals and state officials have much to discuss in the coming months.

“Those capital needs are not small,” said Russ. “They represent a major devotion of resources from somewhere. We will look toward doing what’s best for students and teachers.”

In some cases, local leaders will face few options—including bonds and local tax hikes—for generating the cash. Many advocates say state lawmakers must intervene, although political traction for such an idea has been hard to find, particularly in the Senate.

A bipartisan proposal to place a $1.9 billion school construction bond on the statewide ballot passed a House education committee last year, but never emerged for a full vote in the chamber. That’s likely because of reluctance in the state Senate, which has been considerably more critical of school districts’ spending priorities in recent years.

Senate President Pro Tem Phil Berger’s office couldn’t be reached for an interview with Policy Watch Wednesday, but multiple state lawmakers, Republicans and Democrats alike, raised the possibility of a state bond during discussions of last week’s class size pact.

Sen. Rick Horner, a Wilson Republican, called the lack of capital funding “the only error” in lawmakers’ class size accord.

“But if I was on a local school board and I got a windfall one time, there’s a great chance for these counties to do a capital improvement project,” added Horner.

Meanwhile, Sen. Tommy Tucker, a Union County Republican who co-chairs the Senate Finance Committee, said the state may indeed require a school bond if districts are to address their facility needs.

Sources within the legislature say both chambers, particularly the House, will be under intense pressure to move a bond package early in this year’s session.

The bond should bundle in greater support for the state’s poorer counties, supporters say, a key component of last year’s stalled bond package.

That’s because all districts face their own needs, says Morris. Some, like Harnett, have a greater need than others.

“We’ve got to do something,” says Morris. “We’re working diligently with county commissioners to spread that money as far as we can, but at the end of the day, we’re going to have to build some schools here before long.”